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Cord-cutting rattles broadcast industry

Multiple broadcast executives told BestMediaInfo.com that cord-cutting has accelerated further in the past 3-4 months. According to their estimates, the industry is losing about a million subscribers every month

In the quarter ending March 2022, the DTH operators lost 1.6 million subscribers, according to the Indian Telecom Services Performance Indicators report by the Telecom Regulatory Authority of India (TRAI).

The number of pay direct-to-home (DTH) subscribers has declined from 68.52 million in December 2021 to 66.92 million in the quarter ending March 31, 2022.

On YoY basis, the number of households dropping their DTH connection is 2.6 million.

The graph above shows that cord-cutting in DTH was almost stagnant for the previous four quarters where the operators lost about a million subscribers. The last quarter alone witnessed a loss of 1.6 million subscribers.

Multiple broadcast executives told BestMediaInfo.com that the cord-cutting has accelerated further in the past 3-4 months and according to their estimates, the broadcast industry is losing about a million subscribers every month.

“It is true that the penetration of television is simultaniously taking place in rural areas but that is more or less on cable television and DD Freedish. If you look at the cable subscribers’ numbers, they are almost stagnant. In fact a few cable operators are registering marginal growth as well. Having said that, the upper strata of households who can affoard OTT or connected TV, are migrating faster than ever,” said one of the executive BestMediaInfo.com spoke with.

Among the top MSOs, GTPL Hathway, Kerala Communicators Cable Ltd (KCCL), NXT Digital (HITS) and NXT Digital Ltd (Cable TV) gained subscribers in the quarter ending March 2022.

Many broadcasters blame the new tariff regime (NTO) of the TRAI for the cord-cutting.

“Even at the entry level, people find cable services unaffordable with limited choices at the whims of local cable operators. At a NCF fee of Rs 130 per month, a cable subscriber gets 100 FTA channels of the choice of the MSO/LCO. On the other hand, the subscriber gets more than 180 channels for free of cost on Freedish which includes all the news channels,” another broadcast veteran observed.

“Why did TRAI limit 100 or 200 channels against NCF fee? After the implementation of DAS, there is no bandwidth issue. Why cannot all 500 FTA channels be offered at Rs 130? The apparent reason for this is that they cared for cable operators’ placement or carriage income more without having any futuristic view. By limiting number of channels for the base price, all the FTA broadcasters will try to get into their base channels by paying huge money. But all this for what? Cord cutting or people moving to free options. That also includes YouTube’s growth,” he explained.

Connected TV may not make up for Linear TV losses

Though number of connected TVs are rising in metros and even in tier two and three towns but broadcasters are unlikely to make up for the losses they are incurring on linear TV.

“In Connected TV, the OEMs (likes of Samsung) and device players such as Amazon and Google want to take a lion’s share of advertising revenue. When we go to connected TV, we lose control over ad inventories and the power to price ad spots,” said a broadcasting industry executive.

The broadcasters are in talks with OEMs and big tech but they claim that connected TV may not be able to fill the linear TV gap. “The absence of any third party measurement is also a roadblock for advertisers,” the executive added.

Another executive said that some part of revenue loss can be covered by GECs through their app subscription but generating TV likes revenue is impossible there.

“Even the likes of Netflix and Disney are struggling. OTT apps of broadcasters have the TV content advantage but does the same content turn out to be sticky for OTT viewers? This may not always be true,” the executive added.


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